Playtika Holding (PLTK) 8 Aug 232023 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to Playtika Q2 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Corporate conference Finance like Lee to now of SVP and would hand over the Tae I Investor Relations. ahead. go Please

Welcome joining for quarter for thank for Holding and Playtika second Call XXXX us Corp. the Earnings everyone today you

Robert the Playtika; CEO Abrahams, President are Craig Officer. Financial Co-Founder and and Joining me Chief today Antokol, on Playtika's call of and

operating and the I'd beyond including but statements, comments like contain company's future a future may anticipated forward-looking guarantee to statements which risks remind are performance, discussion you uncertainties performance. revenue not are but are and limited some control. of other subject that to These and today's of her not to rather

views today you undertake as forward-looking We rely these in no apply obligation These to our after should the and statements the call. update future. on of not statements representing them as

the and discussion an We've uncertainties, For following website Relations deck of see more slide our post the SEC. accompanying risks a the call. filings posted remarks prepared our we also and immediately will Investor with our complete please to

to that over turn will now the call I With Robert.

morning thank Good joining everyone our and for today. call you

Before we the highlight I the for recent financial dive and to acquire franchise. like Governor business announcement to Poker results our of would quarter, into

successfully played various establishing gaming. have leader Over in our history, we have important an industry mobile executed in role acquisitions that Playtika an as

excellence live game promising best-in-class for monetize we operations can our that searching franchise constantly are We and and using ops. optimize

operations, it in market. player a generating from When unique further Europe. social Governor to tools expertise our of well-established revenue leadership we its our as Poker most combined of a see a poker opportunity with in-game base, is good expand franchise with lower and

our results. quarterly Turning to

This EBITDA in technology. net continuing our million This invest demonstrates to by X.X% income of focus developing year-over-year. growth of adjusted and better $XX.X quarter million, running on efficiently which we more marks $XXX credit and generated tools

we teams, of support margins integrating AI-driven AI our investment which are tools and in these the studios, As into to our of in future. early our opportunities result our now the a efforts strategically provide should

how to addition In iBox, we platform of our providing developing while is any a opportunities M&A. with games internal future growth our our expertise support are for tools, in creating seeing industry-leading new combined

now will through discuss detail. the financials turn it will who I the walk in to Craig quarter and greater

Robert. Thank you,

beginning Our performance year the where in the to our expected flat from of the we was with to slightly outlook quarter consistent be down. industry the

whereas we for social quarter, expectations. Throughout saw casual portfolio, below casino our trends our the revenue positive our fell slightly year-over-year portfolio

a company. now record portfolio revenue XX.X% the casual represents for new of Our

start Coming sequential saw off to strong growth normalization in the year we QX.

For generated sequentially of the we year-over-year. X% X.X% revenue quarter, and down million $XXX.X

adjusted $XX.X was X.X% income and X.X% year-over-year. million to was $XXX of down XXXX. EBITDA $XX.X Net in up QX million compared sequentially Credit million,

XX.X% XX.X% margin QX in quarter EBITDA and in credit was Our compared of XX.X% QX adjusted in to the XXXX.

We million up generated X.X% record X.X% from our direct-to-consumer platform, revenues of $XXX.X and year-over-year. sequentially

business makes direct-to-consumer revenues. of overall XX.X% Our up now

strength games year-over-year. Bingo and June's in and Solitaire our business Harvest was X.X% year-over-year. This by growth was increased $XXX.X X.X% up the down results Blitz X.X% Revenue year-over-year X.X% Turning Bingo declined casualty and now our across to sequentially revenue sequentially, million, Journey. driven quarter. for Blitz, Grand

well released is Canon with the game, as in the to the players. focus canning for and saw has significant and from resonated answers we feature and is an is of also gems gameplay gameplay In results enhancer through quarter, generate Gems our a change revenue positive features This that economy the example May. of

initiatives this be Germany. on featuring penetration success its a our well-executed localization, As launching The in-game part Bingo for global attributed of successfully can launch and plans focus of milestone market campaign Blitz, the studio achieved marketing growth by significant a in Drew its Barrymore. to

our the in loyal and release forward title with to Bingo game portfolio and looking slate the dedicated a players of number is and are this the one content half strong we the largest category, throughout community in Blitz back year. of the

million, and revenue off up Solitaire a X.X% was down QX year-over-year. record $XX.X XX.X% sequentially Grand Harvest

normalization we campaign saw we stability new While most successful including players. studio's seasons My the and loyal studio launches quarter-over-quarter, monetization the experienced feature Easter Strong X.X. of Special Farm some sequential The experienced in Set collection addition.

our social games. casino theme Shifting to

X.X% Slotomania year-over-year. Theme was Casino X% revenue X.X% sequentially year-over-year. Social down and X.X% million, revenue declined sequentially Games $XXX.X and

revenue We consecutive stabilizing Slotomania third quarter. are for the encouraged to see

to Turning marketing.

As new for Poker also acquisition of and this for digital part uses the an user iOS. amid seeing out After solution, WSOP, to campaign up we user end roll new studio XXXX. additional framework strong by initiative of we our the of Apple's challenging This optimization capability on scaling Series allows success World introduced innovative initial to attribution plan new environment. studios acquisition the ATT, solution marketing of AI-based

operating second and Turning year-over-year, decreased year-over-year. our for in of performance increased quarter. now X% Cost to core revenue Profitable remains line a the specific P&L XX.X% expenses for tenet items us.

that resulting a as QX, The robust were margins for decreased R&D certain in we fourth As lower prioritize flow. operational free industry-leading expenses and end provisions the of XXXX. had the largely quarter by we driven as cash we at retention force profitability reduction R&D in company, in announced efficiencies bonuses the and well that, year-over-year. XX.X%

expenses marketing largely games. new year-over-year. marketing and by sales were Redecore and of decreased Savings and Sales and expenses acquisition user the X% in driven reduction

spending to noted the UA half during on pull back we our we last quarter, of of XXXX. As some second in Redecore started

QX primarily in savings from that G&A year expenses reduction by we force, had year-over-year. XXXX. XX.X% decreased of contingent due This provisions partly fiscal in consideration was and for from certain to the

equivalents. approximately we million in cash of cash had and As $XXX.X XX, June

as Tier metrics. X $X.XX. on ARPDAU our to operational $X.X declined X% at year-over-year Looking to in focus to declined million. Average increased average year-over-year XX.X% to $XXX,XXX DPU marketing markets efforts DAU we XX.X% year-over-year continue

the guidance the at our end higher adjusted EBITDA. end of year credit As year for end for we of our guidance towards XXXX, for low the full our financial and revenue guidance to expect of

previously. $XXX are and our $XXX expect capital million to expenditures We expenditures from capital million, million revising now million and $XXX between down guidance, $XXX

In terms are substantial With focusing value for financial value-enhancing generating we of favorable will value-accretive a pursue And our executing cash an drive Robert of have mentioned on witnessing M&A capacity strong landscape to market. as flow, increasingly are our the core to deals. going free track we and transactions that forward, strengths shareholders. record committed long-term we the

to take that With be happy questions. your we'd

you. Thank

now ahead. Our Matt from question Cost will [Operator Stanley. Morgan conduct session. question-and-answer We go first a Instructions] Please comes from

now? changed this of why at Thank terms a all And but the favorable different follow-up. of you M&A just to like the one first market you just in one you're deal executed in recently. think Craig increasingly market. I is little M&A what game, on done you. has the in favorable which a I'll you've of kind than It's off it changing some Hi, taking start lean the I target a level. I right have where looking I past. And the for what for the Obviously, then that's is terms everybody. question. Maybe Thanks not acquisitions? kind casino think guess, is in at playbook left more potential in the at making time you, of

Matt. Thanks Sure.

I consolidation is we're is seeing that think in industry the continuing. what

And We allows in operational business. their market. established giving franchises that live and metrics us to have improve acquire a us differentiated of type expertise therefore technology platform an operations a this the that's and and advantage

us. smaller I that's what studios given, an think scaling seeing for and is marketing landscape happening advantage trouble what's we're have in the

a did a we a to variety that opportunistic whether high in it's our forward to carve-out executing. complex growth fact The technically do a we'll be ability going also of and and have studio eyes franchise we well-established or more transactions. opportunities, our And demonstrates continue on

go of detail about will differently of a the Where Great. how World the it new the Poker. were? the what And And results solution, prepared the the roll there? out new you're just think, studio. then mentioned campaign? acquisition long remarks on little to rest solution comment more around I Can take What you for you the then user new bit just in into Series of the doing to

Sure. Nir that Korczak, our will take one. CMO

the things real with the with launched the So we WSOP have we did and campaign also QX, basically things team in iOS. we also did

So the apply quality of better we technology leveraging our are order results and in AI to are there also game that the the the plan doing and to and rest we in to basically capabilities traffic understand our prediction the of Qs. there we are to these activities see what we have coming good We a buying.

Thank you.

moment our One you. Thank next question. for

from comes Credit question Ju Stephen ahead. next go Suisse. Please from Our

Thank you. Okay.

good had in jump DTC So you I think pretty revenue sequentially. a

you. Thank launches game driving about mix franchises be So there? in can new talk the which you that change might or

Thanks Yes. for question. the

we to of we're is this another obviously plan. our running to games network there. our coming as will growth the going current year add The the by at So going be beginning is said and is from two Everything by plan. the

at of this our track and started As the focusing advantage Playtika as on before very we the and as on very in said important That's beginning. are said is beginning is a big it. focus. this This we we we a competitors we are

you. Thank

you. moment next One Thank our for question.

from Our Please comes of Dessouky next Bank from ahead. America. question Omar go

for question. Thanks guys. Hey, taking the

things In third there to platform particular you other margin heard by sold what gross potential I the parties. and are mobile subscriptions industry -- DTC ask potentially portfolios like subscriptions look gaming fitting and potentials So beyond your expansion. what in we've wanted for into

portfolio stores. things a like where Playtika's little And those I could might bit As you hoping app fit into about well talk opportunities. alternative as was

question. the for Omar Thanks

see building is the is that believe the that our giving I talent quarter we started implement margins we're we in our our We're tools. to invest about it, at -- focusing. XXXX. been started focus already this work. So fueled where AI And everyone last supporting in know like AI. we're AI help around you we really And every the to it doing. to will it. up but we in are important We And is and said today We've speaking are that in in activity tools

future ever Playtika see future. happy and if always the the was the And that all buzzwords really for happy the better only at work and profitability I'm looking were with strong build looking to stable see We really and a an we goods. efficient building and margins. our this delivering always margins results speaking now. for is to that the I'm better about the And the at speaking efficient that of the Playtika beginning see business margin good margin the very company. EBITDA to strong the is I'm

you Thank very Okay. much.

for next One you. Thank moment question. our

from Please Baird. comes next Sebastian from go Our question Colin ahead.

Thanks. Good afternoon.

decisions during could sequential a in marketing you're the in acquisition of And sort discussed? and there obviously Maybe wanted DPUs. on if that the trends changes quarter on AI-powered if you any of drop broadly specific to the Just games retention the ask follow-up maybe more efficiency. to about you customer outside operating made were and more landscape focus talk seeing

Sure. Thanks, Colin.

So similar if DPU. to kind QX QX look of last year decline we in saw a you

So to relates new there. there's seasonality kind it and I acquisition as efficiency there of think some user

think strong QX. second normalized revenue DPU about talked revenue we've correlated after always I in is well with very and component QX the is a

improving out June's Grand it's this on in titles and focusing Journey, say budgets as of biggest franchises I Solitaire that and like and looked we our would terms said on the really As execution. on to profile. Robert Other focused Blitz larger efficiency margin And difference think planning, year marketing than biggest Bingo our was Harvest. I for

you. right. Thank All

you. next our Thank moment question. One for

Our from BTIG. Lampen Please comes go ahead. from Clark question next

Hi. I've got Craig, one development. Thanks taking the for question. on

up about of, hearing we AI-driven your what on felt commentary the those I certainly to last efficiencies user of Sort pretty around think quarters. relative acquisition over challenges were encouraging marketing following couple

for up If that I the World you that helpful it launches into there's would around new seeing leaning title to line put Series with with that back be any you benefits also. titles enough feel of other can comfortable if time or you you end sort have would of development Poker think that same be specific

Thanks the for Sure. Clark. question,

M&A perspective using development organic add sheet around given capability in to been rather has than a the both additional marketplace we are platform positioned really to balance of our portfolio perspective. focus where as our think a and I kind from So IP a

kind cycle acquiring mentioned to helping customers. customer monetizing areas the to think as customers customers of I all us Robert AI life is retaining from across of

organic And titles to accrue and see portfolio going plus we the acquire. our that portfolio across so is our that titles that in benefit we'll in in

that the us we still So moment feel not within be playbook gas do think continues studios, in I development, that development organic although, should organic to time. the have press some rather it's for at like but something the we than this on we

new follow talked up over And about maybe DTC. of you've the I the know coming it. two balance quickly on year. to Got titles

a are reason every little work or terms offering more that is for we yours As DTC your the experience, think table a of broadly eventually? bit maybe portfolio about on I in there for where of wouldn't games titles some of one player guess the

First, games and plan the against and of we the loyalty. always players at maturity suite the look the of the the

Of titles sure the same. it course, to not the same. But all advantage. work not expecting And will the everyone will for we're give work

is big, some Playtika. work. we're on we where with said a very the track about the beginning And this advantage as projection are and feeling sure the And I will of of said we revenues big For strongly what again, our it. -- in

you. Thank

for moment our One question. next you. Thank

Stifel. next Our go Drew Please from comes ahead. Crum question from

And guys. imply for on tracking comment underperformed out bit see second this can your for a in year? XQ. of I forecast? the casino exiting how was you Hey, a Should in morning. that the think of little your Good comment does terms Slotomania remarks decline? half maybe relative What the business casino rate prepared there Thanks. outlook to in is we flatten

on comments any Thanks. be So Slotomania helpful. would

Sure.

So we've about I quarters. think three was for continue ago area terms stabilize of us. key of last trends to talked a focus over seen we And a as quarters in of couple it the Slotomania

rest we're portfolio the can and there pleased with And the we appropriate making stabilize Obviously, further investments. making so I that of think assumptions some we're that.

just an Slotomania of rest we so for well. it's we've with done it portfolio as expect area And And of it us. focus with as do to the the

question. for One you. Thank moment next Okay. our

question Lee Our from Aaron go next from ahead. Mcquarie. Please comes

Hey, good my questions. morning. Thanks for taking

announced organic seem around the growth but obviously reached acquisition core beyond? of bit maybe some could should a of games about you how stabilization have this the of comments inorganic for you on and you just growth to So touched recently versus in we more Poker. others. and on And give have some in And your M&A your XXXX thinking in believe market, Governor color you also I be

guidance giving We're Aaron. at long-term Thanks point. not this

earlier, mentioned market. us continue think I for M&A opportunistic opportunities the that be -- we as there's to in to

look And forward. so see we as that opportunity as big we a

live on and example guidance that franchise I ability of grow to platform is no yes, of ops to Poker good technology and Governor think asset. But help the well-established beyond a there's bolt a leverage our further XXXX.

of marketing live Okay. historically, your Fair enough. And I was then that acquisition. on the the it distribution and each acquisition, to bring were ops Poker add you and Governor that think value

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where is additive, So really really it past Thank be like where you. it's ops it the of think acquisitions you live you all the above. can is or

for the So thanks question.

bit But of Poker, think it. the the most look you we is I at because deal. okay, bringing early we Governor close it's still say, here didn't that are of don't something think companies the have when to I what a little

and in experience operation of have. is games you even spending compare running monetization nine to that that The we're today what cannot something others of

in years So for game first, and when we can strong other stable help strong this this with stuff. very And second, not that's running with two a a community. that very a many saw at very saw company, a game Playtika, we stuff, we only important team look big

help bring. okay, looking what So today we companies. can can to other only not we're What we

we them. we can And We what what from are learn do get. looking

stable strong can is our approach We're that us looking future. businesses. with in this the looking challenges communities. the come We're they will that from big that we come companies for different teams for have change a So with help

Craig. Thanks Okay. Got it. color. Thank Robert. the you, Appreciate

Thank you.

for moment next our question. One

Our next Handler ahead. ROTH from MKM. question from go comes Eric Please

more a on Yes. could for little Good talk bit the thanks morning question. Wonder, you if M&A. and

As the holes just just some grow? is you fill in can that you trying deals, portfolio, are you're or looking look games you think maybe at to in at you

to making Before deals this we're sense. for a so and high. few way the looking. looking we okay? that our and good So deals, looking everything a prices ago In We're first, years deal way everything, we're for thinking fit are need see was that

is coming everything normal Now, prices. normal, to coming to

the it's environment is is So deals. -- to This more comfortable make one.

Second, said we're teams stable us looking again for strong can teams, that help I before. as

to more to a for more like have portfolio. -- games US. And bigger would third, stability. force. build We're like the for more build in in yes grossing would top We're we looking looking to games XXX the We

opportunities. see this. looking. M&A. We We're still do to doing we're again, still we searching. said We're And going We're

We excited we And time about for have we future. more the that are hope really now. the have

wonder, didn't Okay. that And does with World a Poker, you just Governor's necessarily provide follow-up Series of with Poker, I then, Governor's of as maybe Poker. of what you have

the actually don't World Poker of it's look something main First, you XX issues not Governor one Poker Poker, Governor centers Poker and very is competing not that that there. have strong are we of we that of bringing have that Series of of is you at localization. When Governor is against

of Poker So the Governor together, we strongest Social Club become in world. with one will number the poker,

So it's win-win for a us situation.

you. Thank Great.

next moment One you. question. for Thank our

comes next Please from question Cowen. go from Our [indiscernible] ahead.

big of that EBITDA? that or already XXXX Thanks. the is on expected your guidance? topic to the is Staying of in updated the Hi. reflected of what that revenue fiscal Governor your is title? Does how Poker, And -- impact

number we're to And hasn't Sure. guidance relatively later not QX. disclosing but we immaterial time. yet a the at guidance. close this the Well, it's It's transaction into number given will baked in closed our it's and gave,

Thank it. you. Got

moment Thank next for question. our you. One

from go Sachs. Please comes Goldman ahead. question next Our Eric Sheridan from

my taking question. for you Thank

growth down. sort to a flat about the You guys industry talked in of earlier being of framing call

of I big move changes as Apple we think away further that pandemic, made. continues from from some digesting the of we further as debates to one the privacy the move be, investor away

What of do double-digit people longer term? thought own you. perspective you getting looking barriers low mobile back industry to normalized Thank lot if for was see a growth curious to gaming type and the on potentially as Just of that. sort some especially mid-single sort level growth, of not, more the of normalized that your

Sure.

lens, think from if from doing look So, at it our getting I back transactions. really -- to I it's

active year reliant of every not growth. pipeline a we're Given we organic in that the or gaming M&A for advantage valuations on driving kind out we're a environment. last while the more And now coming in marketplace we given to start sky more years don't companies, market have the other most of few growth large of opportunistic and like titles position high, being were current taking

us, So think layer how continue we'll inception. we company's to for transactions it on the of we've as to done history I growth get since over sort back

see market execute. we in more to So really a and plan consolidating growth us how we that's for that what is mature

Thank you.

moment question. One our next you. Thank for

from Our next question comes go ahead. from Brian Fargo. Wells Please Fitzgerald

Thanks guys.

and Just changing long how a about then, of drive Digital the Playtika. Anything a for really showed follow-up game that version how of can what and Act means quarter. a up you in and it to direct-to-consumer any DTC to And meaningful be this thinking you're adoption contributor? on the legislations Thanks. for EU's quick updates how similar Markets that take

question. Robert, that Sure. will take first

me. hope So now you I hear

the about we DTC. of Regarding spoke what nothing part changed question, in the first

track. We are on

happy. would and more changing it's to biggest that drive again, I margin anything. going to the EBITDA advantage not drive are the are profitability. to drive we more EBITDA, say, tool in future, working the our to and Again, better We're really revenue, we're more We use same.

Craig I the you. half, tell think Regarding will second

is not terms year in going now. There's guidance affect this of our to for Yes. terms in of it's on us right and that radar nothing impact

Robert. Okay. Thanks Craig. Thanks,

Thank questions you. further I am at no time. this showing

you this So Thank concludes call. for today's conference participating.

now disconnect. Thank may you. You